Press Release
October 30, 2018

Apollo Investment Corporation Reports Financial Results for the Quarter Ended September 30, 2018

Apollo Investment Corporation Reports Financial Results for the Quarter Ended September 30, 2018

Board of Directors Approves a One-for-Three Reverse Stock Split
and
Authorizes a New $50 Million Stock Repurchase Plan

Fiscal Second Quarter and Other Recent Highlights:

  • Net investment income per share for the quarter was $0.15 compared to $0.15 for the quarter ended June 30, 2018
  • Net asset value per share as of the end of the quarter was $6.47 compared to $6.47 as of June 30, 2018
  • Continued to successfully execute portfolio repositioning strategy with core strategies(1) representing 78% of the portfolio(2) as of the end of the quarter
  • Net leverage(3) as of the end of the quarter was 0.68x, compared to 0.78x as of June 30, 2018
  • Board of Directors approves a one-for-three reverse stock split
  • Declared a distribution of $0.15 per share (or $0.45 per share adjusted for the one-for-three reverse stock split)
  • Repurchased 2.9 million shares of common stock for an aggregate cost of $16.1 million during the quarter
  • Board of Directors authorizes a new $50 million stock repurchase plan
  • Received $1.59 billion of commitments for an amendment to the Senior Secured Facility which is expected to close in early November. The amendment reduces the asset coverage covenant from 200% to 150%, increases the size of the facility by $400 million, and extends the maturity from December 2021 to November 2023

NEW YORK--(BUSINESS WIRE)-- Apollo Investment Corporation (NASDAQ:AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its second fiscal quarter ended September 30, 2018. The Company’s net investment income was $0.15 per share for the quarter ended September 30, 2018, compared to $0.15 per share for the quarter ended June 30, 2018. The Company’s net asset value (“NAV”) was $6.47per share as of September 30, 2018, compared to $6.47 as of June 30, 2018.

On October 30, 2018, the Board of Directors (the “Board”) declared a distribution of $0.15 per share (or $0.45 adjusted for the one-for-three reverse stock split), payable on January 4, 2019 to shareholders of record as of December 20, 2018.

The Company also announced today that the Board has approved a one-for-three reverse stock split of the Company’s common stock which will be effective as of the close of business as of November 30, 2018 (the “Effective Time”). The Company's common stock is expected to begin trading on a split-adjusted basis at the market open on December 3, 2018.

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(1) Core strategies include corporate lending, aviation, life sciences, asset based and lender finance.
(2) On a fair value basis.
(3) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.

The Company also announced today that the Board has approved a new stock repurchase plan (the “Repurchase Plan”) to acquire up to $50 million of the Company’s common stock. The new Repurchase Plan is in addition to the Company's existing share repurchase authorization, of which approximately $3.3 million of repurchase capacity remains. Accordingly, the Company now has approximately $53.3 million available for stock repurchases under its repurchase program.

Mr. Howard Widra, Apollo Investment’s Chief Executive Officer commented, “During the quarter, our investment activity focused on senior first lien floating rate loans sourced by Apollo’s Direct Origination platform. Nearly all of the investments made during the quarter have a reduced risk profile in terms of both leverage and spread, consistent with our plan to prudently grow assets and increase leverage over time.” Mr. Widra continued, “We believe that a higher nominal stock price from the reverse stock authorized by our Board will attract a much broader universe of investors and reduce the volatility of our stock. In addition, the Board’s decision to expand our share repurchase program underscores our commitment to creating value for our shareholders.”

One-for-Three Reverse Stock Split

The Company has retained its transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), to act as its exchange agent for the reverse stock split. Stockholders are not required to take any action to effectuate the exchange of their shares. The reverse stock split will apply to all of the Company’s outstanding shares of common stock and therefore will not affect any stockholder's relative ownership percentage.

At the Effective Time, every three issued and outstanding shares of common stock will be converted into one issued and outstanding share without any change in the par value per share. No fractional shares will be issued in connection with the reverse stock split as the Company intends to cancel fractional shares associated with the reverse stock split. The number of authorized shares of common stock will not be adjusted for the reverse stock split. AINV’s common stock will continue trading on the NASDAQ under the ticker symbol “AINV” but will trade under a new CUSIP number.

Each stockholder holding fractional shares will be entitled to receive cash in lieu of such fractional shares. Stockholders of record will be receiving information from AST regarding their stock ownership following the reverse stock split and cash in lieu of fractional share payment, if applicable. Stockholders who hold shares in brokerage accounts are encouraged to contact their brokers as brokers may have different procedures for processing the reverse stock split and making payment for fractional shares. For further information, stockholders should contact AST by telephone at 1-888-777-0324.

Stock Repurchase Plan

Under the Repurchase Plan, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time provided that the Company complies with the prohibitions under its insider trading policies and the requirements of Rule 10b-18 of the Exchange Act, including certain price, market volume and timing constraints. The Company intends to allocate a portion of the authorized amount under the Repurchase Plan to be repurchased in accordance with Rule 10b5-1 of the Exchange Act (the “10b5-1 Plan”). The Repurchase Plan and the 10b5-1 Plan are designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. The Repurchase Plan does not have an expiration date and may continue to be modified or discontinued at any time.

FINANCIAL HIGHLIGHTS

 
 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

($ in billions, except per share data)

2018

2018

2018

2017

2017

Total assets $ 2.39 $ 2.57 $ 2.31 $ 2.42 $ 2.45
Investment portfolio (fair value) $ 2.32 $ 2.50 $ 2.25 $ 2.35 $ 2.36
Debt outstanding $ 0.95 $ 1.10 $ 0.79 $ 0.88 $ 0.86
Net assets $ 1.37 $ 1.39 $ 1.42 $ 1.44 $ 1.47
Net asset value per share $ 6.47 $ 6.47 $ 6.56 $ 6.60 $ 6.72
 
Debt-to-equity ratio 0.69 x 0.79 x 0.56 x 0.61 x 0.59 x
Net leverage ratio (1) 0.68 x 0.78 x 0.57 x 0.62 x 0.59 x
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(1)   The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
 

PORTFOLIO AND INVESTMENT ACTIVITY

 
 

Three Months Ended

 

Six Months Ended

September 30,

September 30,

(in millions)*2018   20172018   2017
Investments made in portfolio companies $   363.6 $   265.4 $   722.5 $   607.5
Investments sold (163.2 ) (11.7 ) (178.1 ) (21.7 )
Net activity before repaid investments 200.3 253.7 544.4 585.8
Investments repaid (372.1 ) (328.1 ) (465.8 ) (570.1 )
Net investment activity $   (171.7 ) $   (74.4 ) $   78.6   $   15.7  
 
Portfolio companies at beginning of period 96 84 90 86
Number of new portfolio companies 9 12 16 23
Number of exited portfolio companies (7 ) (9 ) (8 ) (22 )
Portfolio companies at end of period 98   87   98   87  
       
Number of investments made in existing portfolio companies 16   11   24   16  

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* Totals may not foot due to rounding.

 

OPERATING RESULTS

 
 

Three Months Ended

 

Six Months Ended

September 30,

September 30,

(in millions)*2018   20172018   2017
Net investment income $   32.2   $   34.2   $   63.7   $   67.5  
Net realized and change in unrealized losses (4.1 ) (2.4 )